Archive for the ‘Strategic Sourcing’ Category

The Price of Dye in China

Tuesday, November 28th, 2017

 

Todays’s Post is by Eli Razov, SafeSourcing  Account Manager.

What are Leuco Dyes and how are the affecting millions across the globe? Right now the world is seeing huge increases in the thermal paper market. Leuco  dyes are made of many different chemicals which can combine  to achieve the desired color. These dyes have a colorless leuco form when crystalline or when in a pH neutral environment, but become colored when dissolved in a melt and exposed to an acidic environment. Lueco dyes provide little color when melted unless they are melted with one or more organic acids. These are called developers. One example of organic acid is Bisphenol A (BPA). These developers and Leuco dyes often mix poorly upon melting. A third chemical called a sensitizer is often added to the imaging layer to increase the effect. So what does this mean?

These are the components used to make thermal paper. The same paper you see daily from receipts at the local grocery store to fast food chains. The world thermal paper market is about one million tons annually, with about 2/3 of that tonnage for receipt paper. But right now, there is a major shortage in Lueco Dyes. This shortage is due to a company in China named Connect Chemicals which is responsible for 35% – 40% of global dye demand for thermal coaters. In September of 2017 the Connect Chemicals was shut down due to environmental reasons and China’s new anti-pollution laws. This spells disaster for retailers especially Going into the holiday season, which is the busiest time of year. Thermal paper pricing has seen an increase of over 20%-45%. This is making the demand outgrow the supply in many cases. Many major distributors have been unable to supply their entire current customer base and are preventing them from acquiring new clients.

There is hope because this shortage is estimated to be only roughly 3 months while Connect Chemicals closes to conform to China’s new environmental laws. This will take months to recover losses and hopefully set the market normal again.

For more information on how SafeSourcing can assist you or on our “Risk Free” trial program, please contact a SafeSourcing Representative we have an entire team waiting to assist you today.

We look forward to and appreciate your comments.

References —————————————————-

https://en.wikipedia.org/wiki/Thermal_paper

https://cohally.com/2017/10/05/largest-supplier-of-leuco-dye-shut-down-in-china-for-a-minimum-of-three-months/

 

Share This Post

No Empty Chairs at the Table?

Thursday, November 9th, 2017

 

Today’s post is from our SafeSourcing Archives!

Many procurement professionals state they do not have a strategic role in board meetings or with major organization decisions. Why should a procurement professional participate in board meetings?

Companies that do not engage their procurement department early in the process are failing to make effective purchasing decisions, not fully leveraging their spend and economics of scale, and opening themselves to commercial risk. Procurement is usually brought into the process to either close a deal or execute the contract; at this point it is too late to add significant value.

Common issues corporations face when procurement has little engagement within the department:

• Spend is spread thin throughout multiple categories and suppliers.
• Process improvements (make vs. buy) are not always the ideal cost-savings decision
• Procurement policies are lacking – leading to no contracts, multiple price points, etc.

Handling these internal issues is not a day’s job. Procurement will need to monitor and track compliance with policies within departments. Departments that do not comply will be held accountable. Many times the CPO will need to become involved in this initiative to place more focus on the value of procurement.

In turn, this will also require procurement to refocus their efforts to include other value-added services to the departments besides simply reducing costs. However, this usually requires a change in culture, taking procurement away from the tactical, category-focused culture that dominates most functions, to one that is fully aligned with the company’s goals.

At SafeSourcing, we are an extension to your procurement department. We will work with procurement and other departments to help avoid the common issues when procurement does not have a chair at the table.  Please contact us in order to find out more.

We look forward to and appreciate your comments

Share This Post

Automation and Innovation

Tuesday, October 24th, 2017

 

Today’s post is written by Ivy Ray, Account Manager at SafeSourcing Inc.

Improving the quality of processes and maintaining acceptable levels of performance quality, are critical factors in the success of any organization.  Considering that all processes need to exist to best serve the organization, it is important that all employees be challenged to find new and better ways of achieving the goals in a more efficient and efficient way.

The majority of businesses will be wiped out if they don’t abandon a fixation on status quo, because the environment of the future will demand a continuous rethink of processes, people, and technology. The future is being written before our eyes, and the use of automated processes is accelerating the rate of change in business to unprecedented levels. The key to survival and success is agility.

“Innovation is often viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. This is accomplished through more-effective products, processes, services, technologies, or business models that are readily available to markets, governments and society”. (https://en.wikipedia.org/wiki/Innovation)

1) Automate Processes

  • • Build a culture around automation.
  • • Organizations that successfully utilize technology to support innovative approaches can save significantly on time and labor.
  • • Businesses risk becoming obsolete and bankrupt when they refuse to adapt.

2) Innovation

  • • You don’t have to be the one to create it.  Creating a better way of accomplishing a task is the beginning of innovation.
  • • Innovation has no end. What we want and what we need keeps changing.

3) Tools

  • • Search for tools that will help you accomplish your goals.
  • • Understand your long term plans and choose a tool that will grow with you.
  • • SafeSourcing has a suite of tools that are key to your sourcing needs.

“Technology will continue to become more powerful and easy to use and therefore more useful in driving effectiveness and risk management.” (https://spendmatters.com/uk/future-contingent-labour-predictions-trends/)

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Share This Post

Winter Parking Lot Maintenance

Friday, September 29th, 2017

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

It’s hard to believe but winter is just around the corner and with it comes the harsh conditions that can deteriorate your parking lot and driveways.  All of the harsh conditions such as rain, snow, ice and the chemical used to melt these conditions can take a toll on a poorly maintained area.  Make sure to keep the area clean.  This means removing any materials such as leaves, planting materials, rocks and gravel.  These types of materials can hold in moisture and may help cause early corrosion.  If there are any areas that contain chemicals such as oil, gas, or other liquids, make sure and use the proper cleaner to remove the stains.  Leaving these types of petroleum stains can damage the area even if they are seal coated.  Once the seal coating is damaged, water may be able to seep in through small cracks which will weaken the area and allow larger cracks to form.  If you do find that you already have small cracks while cleaning, then repair the cracks before further damage occurs.  Not repairing cracks will eventually lead to the development of pot holes which will be lead to more costly problems.  Once cleaned and repaired make sure that it is seal coated.  This should be done about every two to three years to help protect the asphalt from surface water, sun and harsh chemicals.  Below are some tips for keeping your parking lot well maintained.

➢ Routinely Inspect

➢ Keep it Clean

➢ Keep it Sealed

➢ Remove all Chemical Stains

➢ Look for Bad Drainage Areas

➢ Fill Cracks and Pot Holes

If you need help finding a licensed maintenance company to maintain your parking lot, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which company meets your needs.  If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

Share This Post

Here is some Lasik for retail e-procurement professionals in order to create better focus.

Monday, July 17th, 2017

 

Here’s and old post that continues to have merit with a link to another resource from FitSmallBusiness.com

Very often this author gets the question as to where to start in the e-procurement process. Too often I read that one needs to do a detailed discovery. The question is of what and how to get to the right place the quickest. So here is some Lasik for you that will help you see a little more clearly.

Using another idiom, and with renewed focus we hope to make it possible to see the forest for the trees by not focusing on excessive detail that is not needed yet.

There are four areas where you should begin your search for an e-procurement starting point and they are pretty simple.

1. Gross Sales
2. Cost of Goods Sold
3. Gross Margin
4. EBITDA.

This is really to say that if you take a look at your top line or Gross Sales and your bottom line or EBITDA and they are out of whack relative to your plan or industry averages you need to look at the above the gross margin line or Cost of Goods Sold or below the gross margin line which is expense related items for as an e-procurement focal point..

As such a couple of terms whose definitions you should be aware of are as follows.

According to two separate sources, Wikipedia and FitSmallBusiness.com  Cost of Goods Sold or COGS is a financial accounting  term which includes the direct costs attributable to the production or procurement of the goods sold by a company. This amount  can include the materials cost used in creating the goods along with the direct labor costs used to produce the m. It excludes indirect expenses such as distribution costs and sales force costs. COGS appear on the income statement and can be deducted from revenue to calculate a company’s gross margin.

Earnings Before Interest, Taxes, Depreciation and Amortization or EBITDA which is an approximate measure of a company’s operating cash flow based on data from the company’s income statement. EBITDA is calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, and amortization.

Based on the above a lot is determined by who built you annual plan and how realistic it was to begin with.

Tomorrow we will review what underperforming these measure means and how it should point you in the direction as to where to begin your e-procurement focus.

We look forward to and appreciate you comments.

Share This Post

What is rPET?

Thursday, June 8th, 2017

 

Today’s post is from our SafeSourcing Archives.

RPET is recycled polyethylene terephthalate. When consumers recycle plastic bottles and packaging it can be cleaned and made into a federally approved material suitable for direct food contact applications. Below is a list of examples for reusing the material:

1. Beverage Bottles

2. Clam Shell Containers

3. Trays

The rPET is fully compatible with virgin PET and can be used for up to 100% rPET content.  There are numerous advantages for these second-life products listed below:

1. rPET bottles reduce the amount of waste taken to a landfill

2. rPET has a more stable price than virgin PET because it is not tied to the oil market

3. rPET improves society’s carbon footprint

The three advantages above give enough data to support the effort to change to rPET. Now, what do you need to know when sourcing these products? SafeSourcing is experienced in sourcing rPET packaging. Whether you are looking for private label spring water in six sizes or a clam shell container, we can help; we can work with your company to define your needs. In addition, we know which vendors are in the market and their offerings.

For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Share This Post

Retail spend management basics.

Monday, May 8th, 2017

 

Todays post is by Ron Southard, CEO at SafeSourcing Inc.

No you do not!

A major step to trying to understand where to spend your effort when building an e-RFX attack plan is to understand the detail of your company’s P&L and how it can provide clues as to where you might have the most impact.

I meet with buyers or other e-procurement knowledge workers on a regular basis that want to know what categories are the best to select in the short term to prove the benefit of  e-negotiation tools. This quite honestly is not a bad approach for pilot selection as it creates an almost sure thing that results in a lot of excitement and the energy to move the process forward within a company.

Quite often before meeting with a new client, I will analyze their annual report and their summary and detailed P&L if available in order to get a good idea as to where the opportunities are hiding that can have an immediate impact. However in order to have long term viability as a way to conduct the business of buying, a more detailed analysis is required. Quite frankly before you can even begin to discuss vendor or supplier selection, management or evaluation this process is critical.

Key data required to prepare you for this analysis can consist of but is certainly not limited to the following. All of this data is readily available from a variety of industry sources. Quite often the data is a year old but you can bet it is better than anything else your customer may be using today.

1. Research and accumulate your specific Industry data
2. Analyze last years P&L
3. Compare your cost of goods with your Industries averages
4. Compare your gross margins with your Industry averages
5. Compare your net earnings with your industry averages
6. Conduct the same comparisons with selected retailers with whom you compete. Pretty easy if they are public.
7. Compare your departmental sales and margin results to those of your specific industry.
8. Look for department level anomalies.
9. Look for specific product anomalies within major and sub departments.
10.Select top categories that are below plan and outside industry average for cost of goods and margin.
11.Select top products that are underperforming to industry averages and plan

One example of the above might be to look at the grocery department sub category of pet care. Now drill down to the sub category of cat and dog products and a list of all accessories. Now look at what products are underperforming to the industry and plan. Continue your analysis with other underperforming categories.

In summary, did you need a spend cube to try and figure this out? No you did not. You needed someone that understands your industry and your P&L with some analytical common sense.

If you’d like to learn how these techniques can assist you, please contact a SafeSourcing customer services account manager.

As always, we look forward to and appreciate your comments.

Share This Post

Joe, Dirt, Java, Brew, Cuppa, Go Juice, Jitter Juice, Bean Juice, Brain Juice, etc.

Friday, April 21st, 2017

 

Today’s post is by Gayl Southard, SafeSourcing Administrative Consultant,

There are many names for coffee, with people making up their own pet names for the beloved brew. With the warmer weather approaching, iced coffee becomes very popular with the coffee-drinking crowd.  But why is iced coffee more expensive than hot coffee?  Depending upon where you buy your coffee, iced coffee can be as much as 60% higher than hot coffee.  A Starbucks grande cup of Nitro Cold Brew averages $3.60, much more than the company’s regular cold brew, which cost $3.25, and over a dollar more than a hot drip coffee of the same size.

Cold brew coffee is brewed with cold or room temperature water instead of hot water. The lower temperatures mean the extraction is slow and take hours to make – often half the day.  It also requires more coffee.  A standard water to coffee ratio might be 17:1.  For cold brew, it might be 4.5:1.  This coffee, labor and time simply make it a more expensive process.  What is left after this process is a concentrate that is cut down with water.  Other things to consider when ordering a cold brew is that plastic cups cost more than paper cups – also factor in the straws.  Ice is also very expensive.  “Ice is a fortune, Michael Pollack of Brooklyn Roasting company told Gothamist last year.  If you think we go through coffee fast, double that for ice.  We actually store ten gallon refrigerator boxes of ice because our needs are so tremendous.”1

SafeSourcing has a lot of experience sourcing coffee and coffee products. It is a category that is sourced regularly.  For more information on how SafeSourcing can assist you or on our “Risk Free” trial program, please contact a SafeSourcing Representative we have an entire team waiting to assist you today,

Resources:

[1] Ethan Wolff-Mann, Money, 5/31/2016

Share This Post

Why should I schedule a HVAC maintenance appointment?

Thursday, April 20th, 2017

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.
Spring is here and the temperature will soon be rising.  That means we will be turning on our air conditioners for the first time in a few months.  One thing to consider before it gets too warm is scheduling your annual HVAC system maintenance.  This will ensure that your system is running efficiently, help prevent costly breakdowns, and give you piece of mind during the warm season ahead.  During the inspection the technician will inspect the unit and make sure that everything is clean and running correctly.

There are many benefits for maintaining your HVAC units, such as lower energy bills.  Just because the unit is cooling and heating does not mean that all is well.  A system that is not well maintained slowly loses its ability to keep the same temperatures at the same efficiency it once did, therefore leading to slightly more expensive energy bills over time.  Regular maintenance will also prolong the life of the unit.  Units that are not maintained will become dirty which makes some of the parts work harder and shorten the lifespan of those parts.  Below are some benefits of a having a well maintained HVAC unit.

➢ Increased Energy Efficiency

➢ Extended Lifespan

➢ Decrease in Repairs

➢ Early Warning of Worn Parts

➢ Improved Air Quality

➢ Better Humidity Levels

➢ Safer Operation

If you need help finding a trained HVAC technician, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which company meets your needs.  If you would like more information on how SafeSourcing can help you, please contact a SafeSourcingCustomer Service representative.  We have an entire team ready to assist you today.

 

Share This Post

How are you spending your hours?

Wednesday, April 19th, 2017

 

Today’s post is by Steven Belvin, Account Manager at SafeSourcing

There are just not enough hours in the day! Everyone has heard or said this phrase at least once in their life. Sometimes this phase is true and there is simply not enough time to complete a project in one day. However, more often than not, it is a product of poor time management. I am going to give just a couple of tips to better help with your time management.

First, we must understand what time management is.  Dictionary.com defines time management as “the analysis of how working hours are spent and the prioritization of tasks in order to maximize personal efficiency in the workplace.” An easy way of defining time management is to simply say, “How to utilize the 24 hours that a day provides you?” Simple right? Not so much.  It is very easy to get carried away with a project and to put something else on the back burner. To ensure you are utilizing your 24 hours properly, simply stop and perform a few of these tricks:

1) Write down the task you would like to see accomplished in one week.

2) Prioritize those tasks by importance.

3) Write down the task you should be able to complete in one day.

4) Order your daily task by importance.

5) Put an estimated time limit you expect each task to be completed.

6) Schedule your day according to your task.

7) Buckle down and complete the task on your list.

8) If unable to complete a task, make it your top priority for the next day.

I truly believe that if you follow the above task list you will find yourself getting more accomplished in a single day than you thought was possible. This is why at SafeSourcing we have a daily morning meeting where we prioritize the tasks we must complete in a day. Give us a call so you can witness firsthand how quickly we can get an event complete and start saving you money.

For more information on how SafeSourcing can assist your team with this process or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.

Source:

“time management”. Collins English Dictionary – Complete & Unabridged 10th Edition. HarperCollins Publishers. 17 Apr. 2017. <Dictionary.com http://www.dictionary.com/browse/time-management>.

Share This Post